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Income Taxes
6 Months Ended
Aug. 02, 2014
Income Tax Disclosure [Abstract]  
Income Taxes

NOTE 9—INCOME TAXES

The effective tax rate was 38.88% and 38.44% for the three months ended August 2, 2014, and August 3, 2013, respectively. The effective tax rate was 38.60% and 38.58% for the six months ended August 2, 2014, and August 3, 2013, respectively. There were no significant impacts to the Company’s effective tax rate for the three and six months ended August 2, 2014. The effective tax rate for the three and six months ended August 3, 2013 was significantly impacted by (i) non-deductible stock-based compensation, (ii) the Company no longer recording a U.S. valuation allowance against net deferred tax assets and (iii) other non-deductible expenses.

As of August 2, 2014, the Company has retained a valuation allowance of $0.2 million against deferred tax assets for its Shanghai operations.

As of both August 2, 2014 and February 1, 2014, $1.4 million of the exposures related to unrecognized tax benefits would affect the effective tax rate if realized and are included in other long-term obligations on the condensed consolidated balance sheets. These amounts are primarily associated with foreign tax exposures that would, if realized, reduce the amount of net operating losses that would ultimately be utilized. As of August 2, 2014, $0.4 million of the exposures related to unrecognized tax benefits are expected to decrease in the next 12 months due to the lapse of the statute of limitations.

Adjustments required upon adoption of accounting for uncertainty in income taxes related to deferred tax asset accounts were offset by the related valuation allowance. Future changes to the Company’s assessment of the realizability of those deferred tax assets will impact the effective tax rate. The Company accounts for interest and penalties related to exposures as a component of income tax expense. The Company has accrued $0.4 million and $0.3 million of interest associated with exposures as of August 2, 2014 and February 1, 2014, respectively.